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T+1 | UK & Europe to Follow the Americas’ Lead
As T+1 reshapes global markets, Sia explores its impacts and offers a robust framework to help UK & EU firms prepare for the shift.
The Shift to T+1: Why It Matters Now
In May 2024, North American markets officially transitioned from a T+2 to a T+1 securities settlement cycle. The change, reducing the time between trade execution and settlement to a single business day, has already delivered tangible benefits: increased affirmation rates, reduced margin requirements, and consistent settlement fail rates. As global markets take note, the UK and Europe are now accelerating their own plans for T+1 implementation, likely by the end of 2027.
The Global Ripple Effect
T+1 is not just a technical upgrade—it’s a fundamental shift in global market structure. While North America has successfully completed its transition, regions like Europe, Asia, and Australia are still in the preparatory stages. Each region faces unique challenges:
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Europe must coordinate across multiple Central Securities Depositories (CSDs), venues, and regulations.
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Asia-Pacific is balancing local T+2 implementation with global integration pressures.
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Australia is navigating system replacements like CHESS.
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Switzerland and the UK are aligning their timelines and regulatory frameworks with the EU.
Market participants risk operational inefficiencies and settlement failures if they fail to prepare now.
Key Impacts to Anticipate
Sia has identified four core dimensions affected by the T+1 transition:
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Liquidity Pressure
T+1 cycles raise liquidity risk by requiring quicker funding, but may also boost liquidity and reduce Central Counterparty (CCP) margin requirements. -
Operational Risk & Settlement Fails
Compressed post-trade timelines raise error risks, potentially causing settlement fails, especially in regions like Europe with diverse markets and regulations. -
Settlement Infrastructure (including CSDs)
Europe's multiple CSDs and venues complicate settlement efficiency, with standardization crucial for boosting automation and improving efficiency. -
Regulatory Adaptation
Key regulations, including CSDR Article 5 on settlement discipline, will need revision, and trade reporting deadlines must align with the new settlement cycle.
Where are global players in the journey
Globally, market participants and authorizers have been keeping a close eye on the transition in North America and its relative success, fearing they will be left behind in a race to settle.
Our T+1 implementation framework
Sia has been proactively anticipating the shift to T+1 trade settlement and we can provide a framework for T+1 using extensive experience from the US.
